Study On Evaluating Risk Projects In Each Stage

After experiencing the development of more than half a century, Venture capital has become the most powerful "boosters" of the scientific and technological innovation and industrialization.Because high return and high risk co-exist all over the life cycle, many scholars' research focuses on risk valuation or return valuation on the base of analysising many cases to help investors provide an effective means of assessment, but in the existing research venture capital valuation over-emphasizes the risk or the proceeds of a particular project, or focus on assessment methods and the establishment of the system, rather than the environment and development phase of the risk project. In fact the risk and return characteristics of the project in each stage are significantly different, these differences in the risk assessment decision-making is essential ,and therefore should be considered and reflected.The subject of this paper is establishing a risk assessment system that is based on the risk and benefit differences of the risk project in different stages.Analysising the risk characteristics of the venture capital project in all stages on the basis of the full absorption of existing research results, in accordance with Chinese current status the paper has found Chinese risk evaluation index system, and has used AHP on the risk index system for the weight of the risk assessment index at all levels,eventualy projected the comprehensive interpretation of the risk characteristics to investors with a valid reference through qualitative and quantitative methods. However,the risk assessment can not fully show the risk characteristics of the investment projects throughout the life cycle,we should introduce real options approach to assess the project as the primary means of income.Real options approach gives full play to assessing the project proceeds in different stages and can provide dynamic decision-making characteristics.Therefore,this paper has established a dynamic decision-making assessment system based on the risks and benefits in all stages. The use of simulated case and the empirical analysis furtherly show the utility of evaluation system.This study for risk assessment and decision-making investment is of positive significance,first proposed risk assessment indicators in various stages, followed by the use of real options assessment.I taked full advantage of the current research results, the use of Risk Simulator software to project reasonable future cash flow,and simulated 1000 samples,gave the effective ways of the volatility in course of the project assessment.This combination of real options theory has completed the project flexible and dynamic decision-making evaluation and concluded the application of assessment methods of investment projects in various stages, such approaches are the innovation of this paper.